No thoughtful observer can fail to be struck by the size and potential welfare significance of the legal reforms and other institutional changes that are required to transform a control economy into a market economy. The stakes are particularly high when it is an economy in which the bulk of the population lives in extreme poverty. One motivation for us in undertaking this research was to understand the impacts on living standards of the dramatic economic changes that have been going on in rural Vietnam. Vietnam has arguably gone further and faster than any other developing socialist economy in implementing marketbased reforms to the key rural institutions determining how the main nonlabor asset of the poor, agricultural land, is allocated across households. Have these reforms promoted greater efficiency? If so, did the efficiency gains come at a cost to equity? On balance, was poverty reduced? We hope that this book will help answer these questions. There was another motivation for us: a desire to do something better from a methodological point of view than what is typically on offer for assessing the poverty impacts of economywide changes, including structural reforms. One can hardly be happy with “impact assessments” that rely on either anecdotes from observer accounts of uncertain veracity or highly aggregated “offtheshelf” economic models of uncertain empirical relevance to the specific setting. Finding something credible between these extremes is not easy. We believe, however, that much more can be learned about economywide reforms from the careful analysis of household surveys, especially when that analysis is guided by both economic theory and knowledge of the historical and social contexts. That is what we hope to demonstrate in this book.
LAND IN TRANSITION Reform and Poverty in Rural Vietnam Martin Ravallion Dominique van de Walle LAND IN TRANSITION LAND IN TRANSITION Reform and Poverty in Rural Vietnam Martin Ravallion Dominique van de Walle A copublication of Palgrave Macmillan and the World Bank © 2008 The International Bank for Reconstruction and Development / The World Bank 1818 H Street, NW Washington, DC 20433 Telephone: 202-473-1000 Internet: www.worldbank.org E-mail: feedback@worldbank.org All rights reserved 11 10 09 08 A copublication of The World Bank and Palgrave Macmillan Palgrave Macmillan Houndmills, Basingstoke, Hampshire RG21 6XS and 175 Fifth Avenue, New York, NY 10010 Companies and representatives throughout the world Palgrave Macmillan is the global academic imprint of the Palgrave Macmillan division of St Martin’s Press, LLC and of Palgrave Macmillan Ltd Macmillan® is a registered trademark in the United States, United Kingdom, and other countries Palgrave® is a registered trademark in the European Union and other countries This volume is a product of the staff of the International Bank for Reconstruction and Development / The World Bank The findings, interpretations, and conclusions expressed in this volume not necessarily reflect the views of the Executive Directors of The World Bank or the governments they represent The World Bank does not guarantee the accuracy of the data included in this work The boundaries, colors, denominations, and other information shown on any map in this work not imply any judgement on the part of The World Bank concerning the legal status of any territory or the endorsement or acceptance of such boundaries Rights and Permissions The material in this publication is copyrighted Copying and/or transmitting portions or all of this work without permission may be a violation of applicable law The International Bank for Reconstruction and Development / The World Bank encourages dissemination of its work and will normally grant permission to reproduce portions of the work promptly For permission to photocopy or reprint any part of this work, please send a request with complete information to the Copyright Clearance Center Inc., 222 Rosewood Drive, Danvers, MA 01923, USA; telephone: 978-750-8400; fax: 978-750-4470; Internet: www.copyright.com All other queries on rights and licenses, including subsidiary rights, should be addressed to the Office of the Publisher, The World Bank, 1818 H Street, NW, Washington, DC 20433, USA; fax: 202-522-2422; e-mail: pubrights@worldbank.org ISBN: 978-0-8213-7274-6 (softcover) and 978-0-8213-7275-3 (hardcover) eISBN: 978-0-8213-7276-0 DOI: 10.1596/978-0-8213-7274-6 (softcover) and 10.1596/978-0-8213-7275-3 (hardcover) Library of Congress Cataloging-in-Publication Data Ravallion, Martin Land in transition : reform and poverty in rural Vietnam / Martin Ravallion and Dominique van de Walle p cm Includes bibliographical references and index ISBN 978-0-8213-7274-6—ISBN 978-0-8213-7276-0 (electronic) Land reform—Vietnam Vietnam—Economic policy—1975– Vietnam— Economic conditions—1975– I Van de Walle, Dominique II Title HD890.5.Z63R38 2008 333.3’1597—dc22 2007048485 Contents Preface About the Authors Abbreviations ix xi xii Introduction The Issues Guide to the Book Notes 11 The Historical Context and Policy Debates Decollectivization Creating a Market Debates Regional Differences Conclusions Notes 13 16 20 23 30 34 35 Data and Summary Statistics The Vietnam Living Standards and Household Living Standards Surveys The Initial Land Allocation The 1993–98 Household Panel: Land Reallocations Overall Comparisons of Poverty and Landlessness, 1993–2004 A Pseudo-Panel Based on Age Cohorts for 1993–2004 Lessons from the 2004 Land Module Community-Assessed and Self-Assessed Welfare Data from the Survey of Impacts of Rural Roads in Vietnam Annex 3A: Irrigated-Land Equivalents Annex 3B: Means of Key Variables by Age Cohort, 1993 and 2004 Notes 37 Welfare Impacts of Privatizing Land-Use Rights Models of the Actual and Counterfactual Land Allocations 37 39 48 53 59 60 62 64 66 70 72 75 76 v vi CONTENTS Empirical Implementation Regressions for Consumption and Allocated Land Welfare Comparisons Conclusions Annex: Theoretical Model Notes Land Reallocation after the Introduction of a Land Market Gainers and Losers from the Initial Administrative Allocation Modeling the Postreform Land Reallocation Results Conclusions Notes Rising Landlessness: A Sign of Success or Failure? Land Markets, Occupational Choice, and Welfare Incidence and Sources of Rising Landlessness Rising Landlessness and Urbanization: Evidence from the Pseudo-Panel Poverty-Increasing Landlessness? Conclusions Annex 6A: Model of Occupational Choice with and without a Land Market Annex 6B: Data for Decomposition of the Change in Aggregate Landlessness Notes 78 81 90 97 97 99 101 103 105 108 119 120 121 122 125 140 142 148 149 155 156 Access to Credit for the Landless Poor Land and Credit Land and Participation in Antipoverty Programs Why Are the Landless Poor Being Missed for Targeted Credit? Conclusions Notes 159 159 162 167 172 173 Conclusions 175 References 183 Index 193 Figures 3.1 3.2 Frequency Distributions of Consumption, 1993 and 2004 Lorenz Curves for Annual and Perennial Cropland in Rural Vietnam, 1993 and 2004 40 58 CONTENTS 3.3 3.4 4.1 5.1 5.2 6.1 6.2 6.3 6.4 6.5 6.6 6.7 6.8 6.9 6.10 6.11 6.12 6.13 6.14 6.15 6.16 6.17 6A.1 vii Households Classified as Poor by the Commune, 1999 and 2003 Self-Assessed Increases in Living Standards, 1999–2004 63 65 Distribution of Consumption Losses Relative to the Efficient Allocation 93 Proportionate Land Reallocations from 1993 to 1998 against the Proportionate Land Deficit (Efficient Minus Actual) in 1993 Proportionate Land Reallocations from 1993 to 1998 Relative to the 1993 Efficiency Loss, Stratified by Quintile of 1993 Household Consumption per Person Landlessness and Consumption per Person in Rural Vietnam, 1993 and 2004 Noncultivating Households Compared with Landless Households, 1993 and 2004 Landlessness and Consumption per Person for Ethnic Minorities, 1993 and 2004 Landlessness and Consumption in Rural Areas of the Two Deltas, 1993 and 2004 Land and Living Standards for Those with Land, 1993 and 2004 Share of Annual Cropland That Is Irrigated, 1998 and 2004 Land-Quality Gradients as Assessed by Commune Authorities, 1998 and 2004 Incidence of Market-Based Land Transactions, 1994–2004 Incidence of Land Selling, 1997 and 2003 Incidence of Land Buying Sources of Land in Rural Vietnam, 2004 Incidence of Land Titles Based on the Vietnam Household Living Standards Survey, 2004 Incidence of Land Titles Based on the Survey of Impacts of Rural Roads in Vietnam, 1997 and 2003 Wage Earners by Household Consumption per Person, 1993 and 2004 Wage Earners by Household Consumption per Person in the Two Deltas, 1993 and 2004 Landlessness Rates by National Age Cohorts, 1993 and 2004 Changes in Landlessness Rate and Urbanization Rate, 1993–2004 Functions Used in the Theoretical Analysis (g1(A0) ϭ g0(A0)) 109 110 126 128 129 130 131 132 132 133 134 134 135 135 136 137 138 141 142 152 viii 7.1 7.2 7.3 7.4 7.5 7.6 7.7 7.8 CONTENTS Perceived Credit Constraint, 1993 and 2003 Formal Credit Use by Consumption, 1993 and 2004 Use of Informal Credit Sources, 1993 and 2004 Participation in Targeted Antipoverty Programs, 2004 Incidence of Participation in Antipoverty Programs in Rural Mekong Delta, 2004 Knowledge about the Antipoverty Programs, 2004 Impacts of the Antipoverty Programs on CommunityAssessed and Subjective Welfare, 2004 Impacts of Antipoverty Programs, by Land Status 160 162 163 165 166 169 171 172 Tables 3.1 3.2 3.3 Variable Definitions and Descriptive Statistics, 1993 Variable Definitions and Summary Statistics, 1993–98 Poverty, Inequality, and Landholding Status in Rural Vietnam 3.4 Poverty, Inequality, and Landholding Status, by Region 3A.1 Determinants of Farm Profits 3B.1 Means of Key Variables by Age Cohort, 1993 and 2004 4.1 4.2 4.3 4.4 4.5 5.1 5.2 5.3 5.4 Reduced-Form Regressions for Consumption Determinants of Consumption Actual Land Allocations Compared to ConsumptionEfficient Allocations Mean Consumption, Inequality, and Poverty under Alternative Land Allocations Mean Consumption, Inequality, and Poverty with Mobility between Communes Proportionate Gain in Allocated Annual Agricultural Land, 1993–98 Effects of Adding Controls on the Partial Adjustment Coefficients Determinants of Changes in Allocated Annual Agricultural Land Disposal of Allocated Land Decomposition of the Change in Aggregate Landlessness, 1993–2004 6.2 Pseudo-Panel Data Regressions for the Changes in Landlessness and Urbanization as Functions of 1993 Characteristics 6.3 Panel Data Regressions for Change in Log Consumption per Person, 1993–98 6B.1 Data for Decomposition of the Change in Aggregate Landlessness 45 49 54 56 68 70 82 84 87 91 96 112 113 114 118 6.1 139 143 148 155 Preface No thoughtful observer can fail to be struck by the size and potential welfare significance of the legal reforms and other institutional changes that are required to transform a control economy into a market economy The stakes are particularly high when it is an economy in which the bulk of the population lives in extreme poverty One motivation for us in undertaking this research was to understand the impacts on living standards of the dramatic economic changes that have been going on in rural Vietnam Vietnam has arguably gone further and faster than any other developing socialist economy in implementing market-based reforms to the key rural institutions determining how the main nonlabor asset of the poor, agricultural land, is allocated across households Have these reforms promoted greater efficiency? If so, did the efficiency gains come at a cost to equity? On balance, was poverty reduced? We hope that this book will help answer these questions There was another motivation for us: a desire to something better from a methodological point of view than what is typically on offer for assessing the poverty impacts of economywide changes, including structural reforms One can hardly be happy with “impact assessments” that rely on either anecdotes from observer accounts of uncertain veracity or highly aggregated “off-the-shelf” economic models of uncertain empirical relevance to the specific setting Finding something credible between these extremes is not easy We believe, however, that much more can be learned about economywide reforms from the careful analysis of household surveys, especially when that analysis is guided by both economic theory and knowledge of the historical and social contexts That is what we hope to demonstrate in this book In writing Land in Transition, we have assumed familiarity with economics, but we have also tried to make the exposition more accessible than the typical journal articles in economics In particular, we provide extra detail on the steps taken in the analysis, and we relegate more technically demanding material to annexes The book draws on material from some of our more academic papers on these topics—notably Ravallion and van de Walle ix REFERENCES 191 ——— 2005 Vietnam Development Report 2006: Business Hanoi: World Bank ——— 2006 World Development Report: Equity and Development New York: Oxford University Press for the World Bank Wurfel, David 1993 “Doi Moi in Comparative Perspective.” In Reinventing Vietnamese Socialism: Doi Moi in Comparative Perspective, ed William Turley and Mark Selden, 19–52 Boulder, CO: Westview Press Yardley, Jim 2006 “China Rules Out Revaluing in 2006: Wen Addresses Illegal Land Seizures, Rural Poverty, and Internet Censorship.” International Herald Tribune, March 15, p Yeh, Anthony Gar-On, and Xia Li 1999 “Economic Development and Agricultural Land Loss in the Pearl River Delta, China.” Habitat International 23(3): 373–90 Zhou, Jian-Ming 1998 “Is Nominal Public but De Facto Private Land Ownership Appropriate? A Comparative Study among Cambodia, Laos, Vietnam, Japan, Taiwan Province of China, South Korea, China, Myanmar, and North Korea.” Working Paper ECO 98/12, European University Institute, San Domenico, Italy http://www.iue.it/ECO/WP-Texts/ 98_12.html ——— 2001 Sustainable Development in Asia, America, and Europe with Global Applications: A New Approach to Land Ownership Cheltenham, U.K.: Edward Elgar Index Information presented in boxes, figures, notes, and tables is indicated by b, f, n, and t, respectively absolute poverty, 7, 10, 12n13 administrative reallocations by communes, 102 age cohorts, pseudo-panel based on, 59–60, 70–71t, 140–42, 141f, 143f agricultural productivity decollectivization leading to increase in, 3–5 education and, 89, 156n5 land-use certificates (LUCs) and, 103 quotas for, 3, 16 size of holdings and, 21 wealth and, 124, 152 Akram-Lodhi, A Haroon, 4, 11n5, 27, 32–33 allocated land defined, 72n3 irrigated land equivalents, calculating, 66–67, 68–69t as land type, 41, 42, 52 allocation of land See land reform in Vietnam antipoverty programs conclusions regarding, 172–73, 180 DD estimates of effectiveness of programs, 169–70, 173n3–4 ethnic minorities, 29 ITB affecting, 167, 168 knowledge about programs affecting, 167, 169f landless poor less likely to receive credit, 162–67, 165–66f mechanics of, 162–64 mobility of landless, 168, 169 noncredit, 164–65, 168 participation in, 10, 159 reasons for low participation rate of landless poor, 167–71, 169f, 171–72f regional differences in, 164–67, 166f selection processes favoring farmers, 167–69, 171 Asian Development Bank, 36n12 Atkinson, Anthony B., 55 attrition of households between surveys, 48, 118–19 auctioned land, as land type, 42, 102 bald hill land See swidden land Bangladesh, 164 Bank for the Poor (now Vietnam Bank for Social Policies), 163 Bardhan, Pranab, 11n9, 21, 36 Benjamin, Dwayne, 11n12, 31, 33, 35n9 Beresford, Melanie, 18–19 Binh Thuan province, 64 Brandt, Loren, 5, 11n12, 31, 33, 34, 35n9, 61–62, 101–02 Byres, Terry, 12n15 193 194 cadres, local See local cadres Cambodia, 15, 27, 36n11 capital response to land reallocation, 102–03 CBGs (credit-borrowing groups), 164 Center for Rural Progress, 25, 33 Central Highlands, 38 ethnic conflicts in, 28 landlessness in, 57t, 139t lowlands, marked differences from, 36n15 in VLSS 1992/93, 41 China dissatisfaction with collectivization, 14, 15 family farming in, 11n6 food aid to Vietnam, end of, 15 household responsibility system, implications of Vietnamese situation for, 180–81 inequality in, 36n16, 156n7, 177 land allocation and reallocation policies in, land market, absence of, 5, land policy debates in, 27, 181 land-use rights, market economy, effects of transition to, 1–4 poor-area development programs in, 173n4 Chinese ethnic minority in Vietnam, 36n11, 43, 52 Cleveland, William S., 64 collectivization of land, 5, 13–16 communes, administrative reallocations by, 102 Communist Party members, surveys not identifying, 44 community-assessed welfare in 2004 VHLSS survey, 62–64, 63f, 169–70, 171–72f consumption frequency distributions of, 39, 40f INDEX incidence of land transactions and levels of, 131–33, 133–35f landlessness and incidence of land transactions, 131–33, 133–35f incidence of landlessness, 126–27, 126f welfare impact of initial land reform consumption-efficient allocation, 77–78, 87–88t, 90, 92, 97 levels of consumption relative to land allocation, 90–97, 91t, 93–94f, 96t regressions for consumption and allocated land, 81–90, 82–85t, 87–88t consumption-efficient allocation reallocation of land after introduction of land market, 104, 107 welfare impact of initial land reform, 77–78, 87–88t, 90, 92, 97 Contract 100, 16, 61 contract farming, 11n5, 15 contract land, as land type, 52 counterfactual, 5, 7, 8, 75–78, 91t, 96t, 97–99, 113t, 175–77, 181–82 credit for landless poor, 10, 159–73 See also antipoverty programs formal vs informal credit, 161, 162f perceived credit constraints, 159–61, 160f SIRRV data, 160 credit-borrowing groups (CBGs), 164 credit constraints, 159–61, 160f Dasgupta, Partha, 30 data and summary statistics, 2–3, 37–74 INDEX age cohorts, pseudo-panel based on, 59–60, 70–71t, 140–42, 141f, 143f consumption, frequency distributions of, 39, 40f detailed land module in 2004 survey, use of, 60–62 household surveys, 37–39 attrition of households between, 48, 118–19 benefits of careful analysis of, ix SIRRV (1997–2003), 64–66 VHLSS, 2002 and 2004 See Vietnam Household Living Standards Survey VLSS, 1992/93 and 1997/98 See Vietnam Living Standards Survey implications of study regarding, 181–82 initial allocation, 39–44, 45–47t irrigated land equivalents, calculating, 66–67, 68–69t landlessness See under landlessness in Vietnam local cadres, identification of, 44 poverty, measures of, 39 for reallocation of land after introduction of land market, 48–52, 49–51t types of land, 41–42, 52, 53 for welfare impacts of initial land reform, 39–44 DD (difference-in-difference) estimates of impact of antipoverty programs, 169–70, 173n3–4 De Brauw, Alan, 48 Deaton, Angus, 158 decollectivization and privatization process, 2–5, 16–20 decomposition, of change in landlessness, 137–40, 139t, 155–56t 195 Deininger, Klaus, x, 11n8, 36n10, 120n2, 120n4, 158n27 difference-in-difference (DD) estimates of impact of antipoverty programs, 169–70, 173n3–4 disabled persons and veterans, social protection of, 17–18, 20, 43–44, 89 Doi Moi (renovation) program, 2, 16 Dong, Xiao-Yuan, 27, 30 education, effects of, 33 agricultural productivity and, 89, 156n5 landlessness and education levels, 125, 156–57n7 reallocation of land and, 117, 119 welfare impacts of initial land reform and, 86 equity/inequity in land allocation extremes in, issues regarding, 4–5, 9–10, 175–76 landlessness See landlessness in Vietnam levels of consumption, inequality, and poverty relative to land allocation, 90–97, 91t, 93–94f, 96t policy debates regarding, 23–30 reallocation addressing inefficiencies See reallocation of land after introduction of land market trade-offs, 19–20 ethnic minorities landlessness and poverty amongst, 55, 127–29, 129f policy concerns regarding, 28–29 reallocation of land, 117 evaluation, impact, 99n1, 182 196 Falaris, Evangelos, 48 Fan, Shenggen, Farmer’s Union, 164 farming productivity decollectivization leading to increase in, 4–5 quotas for, 3, 16 French War of Independence, 2, 13–14 gainers and losers, from reform, 10, 103–04, 125, 145, 153–54 gender issues, 28, 29, 117, 119 Glewwe, Paul, x, 39, 92, 156n3 government service persons in See local cadres surveys identifying, 44 Grameen Bank, 164 Griffin, Keith, 11n6, 12n14 Guo, Xiaolin, 27 Ha Giang province, 167 Ha Tinh province, 22 Harigaya, Tomoko, 48 Hayami, Yujiro, 25, 31, 36n13, 43, 72n6 head-count index as poverty measure, 39 HEPR (Hunger Eradication and Poverty Reduction) Program, 62, 162–63, 165–66f historical process of land reform, 2–5, 13–36 cooperatives in North, 13–15 decollectivization and privatization process, 2–5, 16–20 French War of Independence and Viet Minh, 2, 13–14 land market, creation of, 5–6, 20–23 local cadres decollectivization, role in, 4, 16–19 land market, control of, 21–22 LTT program, 14, 31, 35n1, 168 NLF, 13–14, 61 policy debates, 23–30 INDEX post-war attempts to collectivize South, 14 precollectivization allocations, effect of, 19 regional differences, 30–34 unpopularity of collectives by 1980s, 14–16 U.S in Vietnam, 13–14 Ho Chi Minh City, 16, 18, 31 Houghton, Jonathan, 26, 31, 55 household surveys See under data and summary statistics Hunger Eradication and Poverty Reduction (HEPR) Program, 62, 162–63, 165–66f Ickowitz, Amy, 11n6, 12n14 indicator-targeting bias (ITB), 167, 168 Indonesia, 36n11 inefficiencies in initial allocation See under reallocation of land after introduction of land market inequity See equity/inequity in land allocation initial land allocation, welfare impacts of See welfare impacts of initial land reform investment response to land reallocation, 102–03 irrigated land equivalents, calculating, 66–67, 68–69t ITB (indicator-targeting bias), 167, 168 Jacoby, Hanan, 5, 156n3 Kerkvliet, Benedict J Tria, 11n4, 11n6, 14, 19, 23, 25, 28 Khan, Azizur, 11n6, 12n14 Kinh ethnic majority, 28, 43, 52 Kolko, Gabriel, 17 Kon Tum province, 64 labor market, 33, 102–03, 123, 136–37, 137–38f, 151–54 Lam, Thi Mai Lan, 19, 26, 81 INDEX Land Law (1988), 2, 8, data and summary statistics, 43, 62 historical context, 16–20, 22, 25 Land Law (1993), 5, data and summary statistics, 38, 43, 52 historical context, 20, 22, 25, 29, 35n5 landlessness and, 134 reallocation of land and, 101, 102 land market China, absence in, 5, creation of, 5–6, 9, 10, 20–23 landlessness resulting from See landlessness in Vietnam occupational choice and, 122–24, 149–54 policy debates regarding, 25–30 reallocation of land following See reallocation of land after introduction of land market reform, 26, 29, 121, 125, 159 rentals, 101–02, 120n1 transaction costs, 22–23 land quality See quality of land land reform in Vietnam, ix, 1–7 analyzing effects of, ix, antipoverty programs See antipoverty programs conclusions regarding, 175–82 data and statistics on See data and summary statistics historical process of See historical process of land reform landlessness See landlessness in Vietnam overall favorable outcomes of, 176–77 policy issues and debates, 16, 23–30 regional differences in, 30–34, 38, 147 See also Central Highlands; Mekong Delta; 197 North; North Central Coast; Northern Uplands; Red River Delta; South; South Central Coast; Southeast welfare impacts of See welfare impacts of initial land reform Land-to-the-Tiller (LTT) program, 14, 31, 35n1, 168, 177 land-use certificates (LUCs) agricultural productivity and, 103 data and summary statistics, 60 historical context, 20, 22, 29 landlessness and, 134–36, 135–36f reallocation of land and, 103 landlessness in Vietnam, 10, 121–58 age cohorts, pseudo-panel based on, 59–60, 70–71t, 140–42, 141f, 143f consumption levels incidence of land transactions and, 131–33, 133–35f incidence of landlessness and, 126–27, 126f credit access and See credit for landless poor data and summary statistics age cohorts, pseudo-panel based on, 59–60, 70–71t consumption, frequency distributions of, 39, 40f detailed land module in 2004 survey, use of, 60–62 poverty and, 53–59, 54t, 56–57t, 58f SIRRV data, 131–34, 146f decomposition of change in, 137–40, 139t, 155–56t definition of, 53 education levels and, 125, 156–57n7 ethnic minorities, 127–29, 129f initial land deficit, relationship to, 117–18, 118t labor market and, 123, 136–37, 137f 198 landlessness in Vietnam (Continued) Lorenz curves for annual and perennial cropland showing increase in inequality of landholding, 55, 58f LUCs, evidence of, 134–36, 135–36f mobile landless, 38–39, 168, 169 model for, 122–24, 149–55, 152f noncultivating households compared, 127, 128f policy debates regarding, 26–28 poverty, relationship to, 29–30 antipoverty programs See antipoverty programs community- and self-assessed welfare segments of 2004 survey, 62–64, 63f, 65f, 169–70, 171–72f conclusions regarding, 148–49, 179–80 credit access See credit for landless poor data and summary statistics, 53–59, 54t, 56–57t, 58f different interpretations of, 125–26 model-based propositions, 124–25 PILE hypothesis, doubtfulness of, 142–48, 148t regional differences in, 129, 130f, 137, 138f, 139–40, 139t, 144, 148 See also under specific regions size of landholding and living standards, relationship between, 120–31, 131f types of land, 53 unemployment and, 55–58 urbanization and, 140–42, 142–43f Lao Cai province, 64 Lao People’s Democratic Republic, 27, 36n11 Li, Guo, Li, Xia, 27 Lin, Justin, INDEX living standards, impact on See welfare impacts of initial land reform Living Standards Measurement Study (LSMS), household surveys sponsored by, 38 local cadres decollectivization, role in, 4, 16–19 farm capital stock, distribution of, 44 identification in household surveys, 44 land market, control of, 21–22 reallocation of land and, 117, 119 welfare impacts of initial land reform and status as, 86, 89 Lokshin, Michael, 63 long-term-use land, as land type, 41, 42, 52 Lorenz curves for agricultural landholdings, 55, 58f LSMS (Living Standards Measurement Study), household surveys sponsored by, 38 LTT (Land-to-the-Tiller) program, 14, 31, 35n1, 168, 177 LUCs See land-use certificates Malarney, Shaun Kingsley, market economy effects of transition to, ix, 1–7 redistributive land reforms in See land reform in Vietnam mass organizations, credit provided by, 163–64 Mekong Delta, 38 antipoverty program participation in, 164–67, 166f, 168 collectivization, early resistance to, 31 detailed land module in 2004 survey, interpretation of, 61–62 education in, 33 heterogeneity of land reform impacts in, 33 199 INDEX irrigated land equivalents, calculating, 67, 68–69t land inequality in, 36n17 land market in, 25 landlessness in, 26, 55, 57t, 63–64, 64t, 65f, 129, 130f, 137, 138f, 139t, 140, 144, 148, 149 reallocation of land in, 102, 113t, 114–16t, 117 safety nets, absence of, 32 unemployment in, 58 in VLSS 1992/93, 41, 44, 45–47t in VLSS 1997/98, 49–51t wage labor market in, 137, 138f welfare impacts of initial land reform in, 82–85t, 86, 87–88t, 89, 90, 91t, 92, 94f, 95, 96t military veterans and disabled, social protection of, 17–18, 20, 43–44, 89 mobile landless, 38–39, 168, 169 Moene, Karl, 30 National Liberation Front (NLF), 13–14, 61 newly cleared land See swidden land Nghe An province, 64 Ngo, Thi Minh, 21, 35, 156n5 Ngo, Vinh Long, 16, 17, 31, 43, 44, 99n3 NLF (National Liberation Front), 13–14, 61 noncultivating households compared to landless households, 127, 128f nongovernmental organizations (NGOs), 22, 32, 62 North cooperatives introduced into, 13–15 differences between South and, 30–34, 147 landlessness and poverty in, 147 North Central Coast, 38 irrigated land equivalents, calculating, 67, 68–69t landlessness in, 56t, 139t reallocation of land in, 113t, 114–16t, 117, 120n9 in VLSS 1992/93, 41, 45–47t welfare impacts of initial land reform in, 82–85t, 86, 87–88t, 90, 91t, 94f, 96t Northern Uplands, 38 antipoverty program participation in, 167 irrigated land equivalents, calculating, 67, 68–69t landlessness in, 56t, 139t local cadres in, 22 lowlands, marked differences from, 36n15 reallocation of land in, 113t, 114–16t, 117 in VLSS 1992/93,45–47t, 41 welfare impacts of initial land reform in, 82–85t, 86, 87–88t, 89, 90, 91t, 93f, 96t occupational choice, 122–24, 149–54 Oxfam, 32 Philippines, 36n11 PILE (poverty-increasing landlessness effect) hypothesis, 142–48, 148t Pingali, Prabhu, 14, 17, 19, 31, 99n3 policy issues and debates, 16, 23–30 poverty antipoverty programs See antipoverty programs community- and self-assessed welfare segments of 2004 VHLSS, 62–64, 63f, 65f, 169–70, 171–72f credit See credit for landless poor equity issues See equity/inequity in land allocation gap, 39, 91t, 92, 95, 96t landlessness, relationship to See under landlessness in Vietnam 200 poverty (Continued) levels of consumption, inequality, and poverty relative to land allocation, 90–97, 91t, 93–94f, 96t measures of, 39 quality of land and, 131, 132f urbanization and, 142 wage labor and, 123, 136–37, 137–38f welfare issues See welfare impacts of initial land reform private land, as land type, 42–43 privatization and decollectivization process, 2–5 productivity of farming See agricultural productivity Program 135, 62, 162–63, 165–66f quality of land fragmentation of holdings to ensure equitable distribution in, 20 poverty and, 131, 132f problems in assessing, 42 VHLSS 2004 detailed land module on, 60 welfare impacts of initial land reform and, 80–81, 90 Ravallion, Martin, ix, x, 1, 11n3, 11n7, 12n13, 63, 99, 173 Ray, Debraj, 30 reallocation of land after introduction of land market, 9, 101–20 administrative reallocations by communes, 102 capital and labor market responses to, 102–03 conclusions regarding, 178–79 consumption-efficient allocation, 104, 107 data and summary statistics used for (VLSS 1997/98), 48–52, 49–51t, 102, 103 education, effects of, 117, 119 to ethnic minorities, 9, 101–20 INDEX gender issues in, 117, 119 inefficiencies in initial allocation characterization of, 103–05 landlessness and, 117–18, 118t as offset to, 103, 119 proportionate changes relative to, 109–11f, 109–12, 112t local cadres in family, effect of, 117, 119 model for assessing, 105–08 regional differences in See under specific regions rentals, 101–02 results obtained, 108–19 bias, sources of, 118–19 controls to partial adjustment coefficients, adding, 112–13, 113t for most comprehensive model, 113–17, 114–16t proportionate changes relative to initial inefficiencies, 109–11f, 109–12, 112t types of land, 52 Red River Delta, 38 education in, 36n22 irrigated land equivalents, calculating, 67, 68–69t land ceilings in, 35n6 land inequality in, 36n17 landlessness in, 26, 56t, 129, 130f, 137, 138f, 139t reallocation of land in, 113t, 114–16t in VLSS 1992/93, 41, 45–47t wage labor market in, 137, 138f welfare impacts of initial land reform in, 82–85t, 86, 87–88t, 89, 90, 91t, 93f, 96t redistributive land reforms See land reform in Vietnam regional differences, 30–34, 38, 147 See also Central Highlands; Mekong Delta; North; North Central Coast; Northern Uplands; Red River Delta; South; South Central Coast; Southeast antipoverty program participation, 164–67, 166f INDEX in landlessness, 129, 130f, 137, 138f, 139–40, 139t, 144, 148 rental market, 101–02, 127 Resolution 10, 16, 31, 35n5, 43 Rozelle, Scott, 5, 11n1, 15 safety nets for crisis management, presence or absence of, 32 Sakata, Shozo, 167 schooling See education, effects of Scott, Steffanie, 89 Selden, Mark, 11n6, 17, 18, 25, 28 self-assessed welfare, 62–64, 65f, 169–70, 171–72f sharecropped or rented land, as land type, 42 Sikor, Thomas, 17, 22 SIRRV (Survey of Impacts of Rural Roads in Vietnam, 1997–2003), 64–66, 131–34, 146f, 160 size of landholding and living standards, relationship between, 120–31, 131f slash and burn agriculture See swidden land Smith, William, x, 22–23, 27, 29, 32, 35n7 sneaky contracts, 15 social protection of veterans and disabled, 17–18, 20, 43–44, 89 SOEs (state-owned enterprises), persons working in See local cadres Son La province, 22, 32 South differences between North and, 30–34, 147 landlessness and poverty in, 147 LTT program in, 14, 31, 35n1, 168, 177 post-war attempts to collectivize, 14 South Central Coast, 38 irrigated land equivalents, calculating, 67, 68–69t landlessness in, 56t, 139t reallocation of land in, 113t, 114–16t, 117 201 in VLSS 1992/93, 41, 45–47t welfare impacts of initial land reform in, 82–85t, 86, 87–88t, 89, 90, 91t, 92, 94f, 95, 96t, 99n33 Southeast, 38 landlessness in, 55, 56–57t, 57t, 139t, 140 market economy, openness to, 31 in VLSS 1992/93, 41 squared poverty gap index, 39 state-owned enterprises (SOEs), persons working in See local cadres subjective (self-assessed) welfare, 62–64, 65f, 169–70, 171–72f summary statistics See data and summary statistics Survey of Impacts of Rural Roads in Vietnam, 1997–2003 (SIRRV), 64–66, 131–34, 146f, 160 swidden land in data and summary statistics, 41, 43, 47t, 51t, 52, 53, 67 defined, 72n2 reallocation of land after establishment of land market and cultivation of, 116t welfare impacts of initial land reform and cultivation of, 83t, 85t, 88t, 89 Swinnen, Johann, x, 11n1, 15 Tanaka, Tomomi, x, 18, 81 targeted antipoverty programs See under credit for landless poor targeting bias, 167, 168 Thai Nguyen province, 64 Thailand, 36n11 Tra Vinh province, 32, 64 trade-offs in allocation of land, 19–20 Tran, Thi Que, 15, 17, 18, 20, 29, 32, 35n4, 35n7, 72n6 Truong, Dao Minh, 22 Udry, Christopher, x, 21, 36n10 unemployment and landlessness in Vietnam, 55–58 202 United States in Vietnam, 5, 13–14 urbanization impact of land reforms on, 26 poverty and, 142, 179 rising landlessness and, 60, 140–42, 142–43f van de Walle, Dominique, ix, x, 28, 32, 48, 66, 80, 156n5, 157n8 veterans and disabled, social protection of, 17–18, 20, 43–44, 89 Veteran’s Association, 164 VHLSS See Vietnam Household Living Standards Survey Viet Minh, 13–14 Vietnam See land reform in Vietnam Vietnam Bank for Social Policies (previously Bank for the Poor), 163 Vietnam Household Living Standards Survey (VHLSS), 38 2002 survey, 38, 53–59, 54t, 56–57t 2004 survey, 38 age cohorts, pseudo-panel based on, 59–60, 70–71t antipoverty program participation, 164 community- and self-assessed welfare, 62–64, 63f, 65f, 169–70, 171–72f detailed land module, 60–62 landlessness and poverty, overall comparisons of, 53–59, 54t, 56–57t reallocations in, 102 rental market, 101, 102 sources of land, 133, 135f Vietnam Living Standards Survey (VLSS), 38 1992/93 survey, 38 access to credit, 161 age cohorts, pseudo-panel based on, 59–60, 70–71t irrigated land equivalents, calculating, 66–67, 68–69t INDEX landlessness and poverty, overall comparisons of, 53–59, 54t, 56–57t rental market, 101, 102 welfare impacts of initial land reform, 39–44, 45–47t, 79 1997/98 survey landlessness and poverty, overall comparisons of, 53–59, 54t, 56–57t reallocation of land after establishment of land market, 48–52, 49–51t, 102, 103 rental market, 101 attrition of households between surveys, 48, 118–19 Vietnam Peasant Union (VPU), 18–19 Vinh Long Ngo, 17, 44 VLSS See Vietnam Living Standards Survey Vo Van Kiet, 16 VPU (Vietnam Peasant Union), 18–19 wage labor market, 33, 102–03, 123, 136–37, 137–38f war veterans and disabled, social protection of, 17–18, 20, 43–44, 89 wealth gradient, in landlessness, 124, 129, 131, 153 welfare, community- and selfassessed, in 2004 VHLSS survey, 62–64, 63f, 65f, 169–70, 171–72f welfare impacts of initial land reform, 4–5, 75–99 conclusions regarding, 97, 177–78 consumption-efficient allocation, 77–78, 87–88t, 90, 92, 97 data and summary statistics used for (VLSS 1992/93), 39–44, 45–47t, 79 definition of “impact,” 75 definition of welfare/living standards, 203 INDEX education, effect of, 86 empirical implementation of model, 78–81 levels of consumption, inequality, and poverty relative to land allocation, 90–97, 91t, 93–94f, 96t local cadre member in household, effect of, 86, 89 model used in assessing, 76–78, 97–99 policy concerns regarding, 29 quality of land, model’s robustness regarding, 80–81, 90 regional differences in See specific regions regressions for consumption and allocated land, 81–90, 82–85t, 87–88t size of landholding and living standards, relationship between, 120–31, 131f types of land, 41–42 Wiegersma, Nancy, 11n6, 13–15, 17, 19, 29–31, 33, 35n1–3, 168 women’s land rights, 28, 29, 117, 119 Women’s Union, 164 World Bank, x, 1, 11n3, 29, 38, 39, 157n7, 173n1 Wurfel, David, 18–19 Xuan, Vo-Tong, 14, 17, 19, 31, 99n3 Yeh, Anthony Gar-On, 27 Youth Union, 164 Zhou, Jian-Ming, 27, 36 ECO-AUDIT Environmental Benefits Statement The World Bank is committed to preserving endangered forests and natural resources The Office of the Publisher has chosen to print Land in Transition on recycled paper with 30 percent postconsumer fiber in accordance with the recommended standards for paper usage set by the Green Press Initiative, a nonprofit program supporting publishers in using fiber that is not sourced from endangered forests For more information, visit www.greenpressinitiative.org Saved: • trees • million Btu of total energy • 651 lb of net greenhouse gases • 2,701 gal of waste water • 347 lb of solid waste EQUITY AND DEVELOPMENT SERIES his book is a case study of Vietnam’s efforts to fight poverty using marketoriented land reforms In the 1980s and 1990s, the country undertook major institutional reforms, and an impressive reduction in poverty followed But what role did the reforms play? Did the efficiency gains from reform come at a cost to equity? Were there both winners and losers? Was rising rural landlessness in the wake of reforms a sign of success or failure? Land in Transition investigates the impacts on living standards of the two stages of land law reform: in 1988, when land was allocated to households administratively and output markets were liberalized; and in 1993, when official land titles were introduced and land transactions were permitted for the first time since communist rule began To fully assess the poverty impacts of these changes, the authors’ analysis of household surveys is guided by both economic theory and knowledge of the historical and social contexts The book delineates lessons from Vietnam’s experience and their implications for current policy debates in China and elsewhere T Ravallion and van de Walle have produced a beautifully clear, careful, and readable analysis of Vietnam’s agrarian reforms They show that the 1988 decollectivization largely avoided “elite capture” and created near-equal family farms These produced more, and were more efficient, than the previous collectives In the interests of equity, the reform did not aim at maximum economic performance; but as the authors show, the sacrifice was not large The authors explore whether China can now learn from Vietnam about similar prospects for market-friendly reforms — Michael Lipton, Founder and Research Professor, Poverty Research Unit, University of Sussex, Brighton, United Kingdom This is a very interesting and very well researched book The authors are leading experts in this field, and this shows They have gone beyond simple analyses to address a set of key issues, such as whether rising landlessness is a sign of success or failure They have also gone out of their way to come up with carefully drafted conclusions, linking these closely to the policy debate on equity and efficiency in Vietnam I expect this report to become a very important and very influential publication, not just in Vietnam but also globally — Johan Swinnen, Professor of Development Economics, Katholieke Universiteit Leuven, Belgium ISBN 978-0-8213-7274-6 SKU 17274 [...]... annual agricultural land- use rights redressed the inefficiencies of the initial administrative allocation of land resulting from the 1988 Land Law Using a panel of farm households spanning the change in land laws and controlling for other nonmarket factors bearing on land allocation, we see to what extent inefficiencies in the initial allocation, as measured in chapter 4, can explain the land reallocations... concerns about rising landlessness in rural Vietnam Is the country heading toward a South Asian style of rural development in which there is a large and unusually poor landless class? Or are farmers simply selling their land to pursue more rewarding activities? In short, does rising rural landlessness in the wake of market-oriented reforms signal an emerging new poverty concern for Vietnam, or is it... possibilities of rising inequity in the wake of these reforms Since these reforms, there have been signs of sharply rising rural landlessness, which have fueled much debate about the wisdom of Vietnam s reforms The outcomes of this second stage of land reform in Vietnam are clearly of interest to China Although China has not followed Vietnam in liberalizing the exchange of agricultural land- use rights,... had not initially been accompanied by the introduction of a free market in land in either country Indeed, in China, the cadres and collectives have largely retained their powers in setting quotas and allocating (and reallocating) land. 10 There have been concerns about the efficiency costs of China’s nonmarket land allocation (see, for example, Brümmer, Glauben, and Lu 2006; Carter and Estrin 2001;... agricultural land- use rights Having removed legal obstacles to buying and selling land- use rights, the government expected that land would be reallocated to eliminate 6 LAND IN TRANSITION the initial inefficiencies in the administrative assignment achieved at decollectivization Freeing up agricultural land markets was a risky reform The outcomes are far from obvious on a priori grounds Land was clearly... empirical methods for investigating the evolving relationship between landlessness, urbanization, and living standards and relevant aspects of how participation in labor and credit markets has changed Finally, the chapter studies the role played by rising landlessness in reducing poverty The main conclusion of chapter 6 is that rising rural landlessness in the wake of these major agrarian reforms is on the... Creating a Market Having assigned the collective land to individual households, the government took the next step of introducing a market in land- use rights In 1993, an important new land law introduced official land titles in the form of land- use certificates (LUCs) and allowed land transactions Land was still officially the property of the state, but usage rights legally could be transferred and exchanged,... ban on administrative reassignment Local cadres also oversee titling, land- use restrictions and planning, 22 LAND IN TRANSITION and land appropriation for infrastructure projects Sikor and Truong (2000: 33) describe well how the reforms with respect to land were mediated by village institutions in Son La, a Northern Uplands province: Local cadres were located at the intersection of the state and villages... squares PILE poverty- increasing landlessness effect SIRRV SOE Survey of Impacts of Rural Roads in Vietnam state-owned enterprise VHLSS VLSS VPU Vietnam Household Living Standards Survey Vietnam Living Standards Survey Vietnam Peasant Union xii 1 Introduction The policy reforms called for in the transition from a socialist command economy to a developing market economy bring both opportunities and risks... of land reform and established de facto private ownership of agricultural land Five years after the first set of reforms in 1988— whereby agriculture in Vietnam was decollectivized, land was allocated to households by administrative means, and output markets were liberalized—legal reforms were undertaken to support the emergence of a land market The 1993 Land Law introduced official land titles and